{"id":5695,"date":"2026-08-21T11:38:15","date_gmt":"2026-08-21T11:38:15","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=5695"},"modified":"2026-08-21T11:38:15","modified_gmt":"2026-08-21T11:38:15","slug":"america-faces-an-affordability-crisis-like-the-one-from-25-years-ago-but-needs-a-fresh-solution","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=5695","title":{"rendered":"America faces an affordability crisis like the one from 25 years ago, but needs a fresh solution"},"content":{"rendered":"
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Affordability is the key issue in the upcoming midterm elections. Families, reeling from years of price hikes and inflation following the pandemic, are desperate for products and services that they can afford, but that are not \u201ccheap.\u201d We are living in an era when companies must find solutions that are not just lower-cost, but rather higher value, offering adequate or even improved performance at a lower price.<\/p>\n

Read more Wall Street is bemused by Bessent\u2019s bond plan and the unwinding punt on the Japanese yen\u2014he\u2019s hinting he knows something the markets don\u2019t<\/a><\/p>\n

There are some affordability strategies that America has already exhausted, and if pursued further, may turn customers away or cause economic havoc. The first is what we call \u201cCostcofication.\u201d Costco\u2019s business model is predicated on making products more affordable to customers through bulk sales. They do not compromise the performance or quality of name brand products, but rather leverage economies of scale in packaging. Consumers can buy their favorite Coca-Cola beverages, Charmin toilet paper, and Dawn dish soap\u2026 if they want them by the case. This sales model has scaling limits\u2014it\u2019s unlikely consumers will want to tow a tanker full of Skippy peanut butter home. It also depends on shoppers being able to afford the Costco membership, large payout for bulk purchases, and have room to store them in their home. Costco is already inaccessible to many Americans, as the average household income of its members is $125,000\/year, yet the median income for the country is $80,000\/year.\u00a0<\/p>\n

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The second cost-saving strategy that is likely maxed out is what we call \u201cWalmartfication.\u201d Charles Fishman has written widely about \u201cThe Wal-Mart Effect,\u201d including how the company often pressures its suppliers to lower quality to achieve affordability through \u201ceveryday low prices.\u201d Suppliers have had to go so far as to design look-alike but cheaper versions of popular brands to meet Walmart\u2019s demands, like Levi Strauss\u2019 \u201cSignature\u201d jeans, which have lighter weight denim than the premium Levi\u2019s brand. Further lowering the quality and performance of products to make them more affordable could damage brand reputation, dissatisfy consumers, and hurt Walmart\u2019s bottom line.<\/p>\n

The third cost-saving strategy we call \u201cTaxpayerfication.\u201d This is when the government makes services more affordable to consumers by subsidizing costs, only to turn around and have them still pay for it through tax increases. This strategy only gives the appearance of improved affordability by either placing the financial burden directly on society, or by kicking the can down the road by increasing the national deficit, which must be paid by Americans someday. The real issues behind the national affordability crises of healthcare, housing, higher education, and childcare are spiraling costs. Without addressing costs directly, shifting who pays them won\u2019t change the underlying problem or save society any money.<\/p>\n

Innovators must look at the new, affordable products and services demanded by Americans with fresh eyes. Adapting existing offerings will likely not work; disrupting them is the only way to address the affordability crisis. We need to provide solutions that deliver high performance at low cost, offering value to consumers. Fortunately, a playbook already exists from which there are many lessons to learn: innovating for emerging markets.<\/p>\n

When GE Healthcare set out to sell CT scanners in China and India, its premium Revolution scanner\u2014costing roughly $650,000 to manufacture\u2014was a nonstarter. Rather than strip features, GE followed a \u201creuse, revise, redesign\u201d discipline: it reused amortized components like the base structure, patient table, and software. It identified the image detector as a pain point driving cost: the Revolution scanner used 128 curved X-ray collectors that could capture the contours of a patient\u2019s body. Rather than using expensive hardware, GE utilized only six, much cheaper flat detectors and invested in improved software to render accurate 3D images. The resulting Brivo CT scanner could perform 75% of the CT procedures that the Revolution could, at a manufacturing cost of only $56,000, making it a commercial success across emerging markets.<\/p>\n

Read more Billionaire Jeff Bezos once asked Warren Buffett why so few people copy his strategy\u2014now he\u2019s backing $7 billion Liverpool FC<\/a><\/p>\n

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Gillette initially tried, and failed, to launch the Vector razor in India\u2014a model considered \u201ccheap\u201d in the eyes of Americans because it was old and obsolete, but still much too expensive for the Indian mainstream. They quickly wised up and realized they had to understand the unique requirements and value propositions of Indian users. The company sent its engineers into consumers\u2019 homes\u2014logging 3,000 hours with more than 1,000 men\u2014and discovered that Indians shave differently than Americans: less often, with thicker stubble, seated in dim light, and rinsing in a cup rather than under running water. Gillette designed the Guard with bump-flattening ribs to avoid cuts and the stress of shaving in low light, and large flush channels to clear hair particles with a little swishing. The Guard has only four parts to keep the price down; it sold for about 25 cents, with blade cartridges at roughly 8 cents. Within four years, the Guard accounted for two of every three razors sold in India.<\/p>\n

Peru\u2019s Innova Schools show the same innovation approach applied to high-value education. Chairman Carlos Rodriguez-Pastor and his team elucidated four requirements for improved schools in Peru: tuition no higher than $130 a month, quality equal to or better than the country\u2019s $15,000-a-year private schools, a model scalable to hundreds of campuses, and profitability. Working with the design firm IDEO, Innova Schools built a \u201cflipped classroom\u201d: 70% teacher-led group work, 30% self-directed online learning supported by a central library of more than 20,000 lesson plans. This model enabled less-expensive teachers to deliver top-tier results. Utilizing modular, reconfigurable buildings slashed construction costs. Today, Innova Schools students outscore both public schools and far pricier private ones. In 2025, 63 Innova Schools in Peru served 64,000 students, with 20 additional schools operating in Mexico, Colombia, and Ecuador.<\/p>\n

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Each of these solutions delivered the core performance customers wanted at a fraction of the price of prior offerings. This disruption was achieved by understanding the unique requirements of emerging market customers and tailoring solutions that delivered the right price and performance. America\u2019s innovators should run this playbook at home to create the affordable, valuable solutions the public demands.<\/p>\n

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The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of <\/em>Fortune.<\/em><\/p>\n

Read more Army unit offers \u2018special 4 day pass\u2019 to play Grand Theft Auto VI for reenlisted troops as part of \u2018unique incentives program\u2019<\/a><\/p>\n

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We are living in an era when companies must find solutions that are not just lower-cost, but rather higher value. 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